What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-12 compared with 2024-03-13 · 106 added, 126 removed, 243 unchanged (49% of the section changed)

3 unchanged sentences

We are a leading supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge.

We are a fabless semiconductor supplier of high-performance standard and semi-custom products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality.

We are a fabless supplier of high-performance semiconductor products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality.

Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial end markets.

4 unchanged sentences

Fiscal 2025 and fiscal 2023 each had a 52-week period.

Net revenue in fiscal 2024 was $5.5 billion and was 7.0% lower than net revenue of $5.9 billion in fiscal 2023.

This was due to a decrease in sales from a majority of our end markets.

Sales decreased from the data center end market by 8%, from the enterprise networking end market by 10%, from the consumer end market by 11%, and from the carrier infrastructure end market by 3%.

The decreases were partially offset by an increase in sales from the automotive/industrial end market by 9% compared to fiscal 2023.

During the second half of fiscal 2023, in response to a softening demand environment, customers started requesting to push out shipments and reschedule orders to manage their inventory.

We have seen these inventory corrections continue to impact our storage customers, as well as enterprise networking and our wired carrier customers.

In addition, we have continued to see low demand from our OEM customers in China.

Starting in the first quarter of fiscal 2024, we have seen a strong increase in demand for our optical products, driven by AI applications.

To secure capacity over the long term, we have entered into and expect to continue to enter into capacity reservation arrangements with certain foundries and partners for substrates.

Net revenue in fiscal 2025 was $5.8 billion and was 5% higher than net revenue of $5.5 billion in fiscal 2024.

This was due to an 88% increase in sales from the data center end market compared to fiscal 2024.

The increase was partially offset by decreases in sales from the carrier infrastructure end market by 68%, from the enterprise networking end market by 49%, from the consumer end market by 49% and from the automotive/industrial end market by 17%.

We have seen strong revenue growth from our data center end market, driven by robust demand for our interconnect and custom compute products from AI applications.

In addition, following a period of inventory correction, we have started to see demand stabilize in our enterprise networking and carrier infrastructure end markets.

To secure capacity over the long term, we have entered into capacity reservation arrangements with certain foundries and partners.

See “Note 8 – Commitments and Contingencies” in the Notes to Consolidated Financial Statements for additional information.

7 unchanged sentences

See also Part I, Item IA, “Risk Factors,” including, but not limited to, the risk detailed under the caption “ Adverse changes in the political, regulatory and economic policies of governments in connection with trade with China and Chinese customers have reduced the demand for our products and damaged our business.

Government Incentives and Grants.

We continue to benefit from lower income tax rates in certain jurisdictions through statutory elections or agreements with governmental agencies, which may include a commitment to maintain, or increase, headcount and business investment levels in those jurisdictions.

The tax benefits associated with these reduced income tax rates are recorded through our income tax provision for the periods in which such incentive tax rates are effective.

However, changes in international taxation, notably the enactment by numerous countries of minimum tax legislation modeled after the Organization for Economic Cooperation and Development’s Pillar Two tax framework, could significantly reduce the income tax benefit associated with these tax incentives.

In addition, certain jurisdictions in which we operate are pursuing alternative incentive programs, which operate within the Pillar Two tax framework.

If we enter into such an incentive, it could have a significant effect on our future operating results and cash flows.

We are currently in negotiation for such incentives with a governmental agency, and if agreement is reached, the incentive could have a significant effect on our operating results beginning in fiscal 2026 and continuing for the duration of the agreed-upon incentive period.

Restructuring .

In the first quarter of fiscal 2024, we initiated a restructuring plan to streamline our organization and optimize resources.

The restructuring and other related charges recorded were $131.1 million for the year ended February 3, 2024.

We continuously evaluate our existing operations to increase operational efficiency, decrease costs and increase profitability.

A restructuring plan was initiated during the third quarter of fiscal 2025 to increase research and development investment in the data center end market and reduce investment in new product development in other end markets including the cancellation of certain future product releases.

We recognized $711.8 million of restructuring related charges for the year ended February 1, 2025, mainly comprised of impairment and write-off of acquired intangible assets, purchased technology licenses, inventories, property and equipment, and other non-current assets, as well as recognition of future contractual obligations, severance, other one-time termination benefits, and other costs.

See “Note 4 – Restructuring” in the Notes to Consolidated Financial Statements for further information.

3 unchanged sentences

The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, legal rules and regulations, and other corporate considerations, as determined by our management team.

During the year ended February 3, 2024, we repurchased 2.5 million shares of our common stock for $150.0 million, including 0.8 million shares of our common stock repurchased for $50.0 million pursuant to a 10b5-1 trading plan.

As of February 3, 2024, $299.5 million remained available for future stock repurchases.

Subsequent to fiscal year end, in March 2024, our Board of Directors increased the repurchase program mentioned above and authorized an additional $3.0 billion to that repurchase program.

On March 7, 2024, we announced that our Board of Directors authorized a $3.0 billion addition to the balance of our existing stock repurchase program.

During the year ended February 1, 2025, we repurchased 9.0 million shares of our common stock for $725.0 million.

As of February 1, 2025, $2.6 billion remained available for future stock repurchases.

Subsequent to fiscal 2025 year end through March 11, 2025, we repurchased 0.7 million shares of our common stock for $45.0 million.

See “Note 10 – Stockholders’ Equity” in the Notes to Consolidated Financial Statements for further information.

As of February 3, 2024, a total of 312.9 million shares have been repurchased since inception of our current and previous stock repurchase programs for an aggregate total of $4.5 billion in cash.

We returned $356.8 million to stockholders in fiscal 2024 through $150.0 million in repurchases of shares of common stock and $206.8 million in cash dividends.

We returned $932.5 million to stockholders in fiscal 2025 through $725.0 million in repurchases of shares of our common stock and $207.5 million in cash dividends.

Cash and Short-Term Investments.

Our cash and cash equivalents were $950.8 million at February 3, 2024, which were $39.8 million higher than our balance at January 28, 2023 of $911.0 million.

Our cash and cash equivalents were $948.3 million at February 1, 2025, which were $2.5 million lower than our balance at February 3, 2024 of $950.8 million.

Sales and Customer Composition.

We regularly monitor the creditworthiness of our customers and distributors and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk.

We regularly monitor the creditworthiness of our distributor and direct customers, and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk.

Most of our sales are made to customers with operations located outside of the United States, primarily in Asia, and a majority of our products are manufactured outside the United States.

10 unchanged sentences

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, provisions for sales returns and allowances, inventory excess and obsolescence, goodwill and other intangible assets, business combinations, restructuring, income taxes, litigation, and other contingencies.

On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, provisions for sales returns and allowances, inventory excess and obsolescence, goodwill and other intangible assets, restructuring, income taxes, litigation, and other contingencies.

We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that are believed to be reasonable under the circumstances when these carrying values are not readily available from other sources.

52 unchanged sentences

federal and state research and development credits and certain acquired net operating losses and deferred tax assets of foreign subsidiaries.

A change in the assessment of the realizability of deferred tax assets may materially impact our tax provision in the period in which a change of assessment occurs.

A change in the assessment of the realizability of deferred tax assets may significantly affect our tax provision in the period in which a change of assessment occurs.

Taxes due on Global Intangible Low-Taxed Income (“GILTI”) inclusions in U.S.

5 unchanged sentences

Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, and the evolution of regulations and court rulings and tax audits.

There can be no assurance that we will accurately predict the outcome of audits, and the amounts ultimately paid on resolution of audits could be materially different than the amounts previously included in our income tax expense and therefore, could have a material impact on our tax provision, results of operations, and cash flows.

Consequently, taxing authorities may impose tax assessments or judgments against us that could materially impact our tax liability and/or our effective income tax rate.

There can be no assurance that we will accurately predict the outcome of audits, and the amounts ultimately paid on resolution of audits could be significantly different than the amounts previously included in our income tax expense and therefore, could have a significant effect on our tax provision, results of operations, and cash flows.

Consequently, taxing authorities may impose tax assessments or judgments against us that could significantly affect our tax liability and/or our effective income tax rate.

We are subject to income tax audits by the respective tax authorities in the jurisdictions in which we operate.

7 unchanged sentences

Unpaid tax liabilities, including the interest and penalties, are released pursuant to a final settlement with tax authorities, completion of audit or expiration of various statutes of limitations.

The material jurisdictions in which we may be subject to examination by tax authorities throughout the world include China, India, Israel, Singapore, Germany, and the United States.

The significant jurisdictions in which we may be subject to examination by tax authorities throughout the world include Germany, India, Israel, Singapore, and the United States.

The recognition and measurement of current taxes payable or refundable, and deferred tax assets and liabilities require that we make certain estimates and judgments.

Changes to these estimates or judgments may have a material effect on our income tax provision in a future period.

Changes to these estimates or judgments may have a significant effect on our income tax provision in a future period.

Long-Lived Assets and Intangible Assets.

41 unchanged sentences

Results of Operations

Years Ended February 3, 2024 and January 28, 2023

Years Ended February 1, 2025 and February 3, 2024

The following table sets forth information derived from our consolidated statements of operations expressed as a percentage of net revenue:

2024 January 28,

2025 February 3,

Net revenue 100.0 % 100.0 %

4 unchanged sentences

Selling, general and administrative 13.8 15.1

Legal settlement — 1.7

Restructuring related charges 6.1 2.4

Total operating expenses 53.8 51.9

Operating income (loss) (10.3) 4.0

Interest income 0.2 0.1

Interest expense (3.8) (2.9)

Other income, net 0.2 0.2

Income (loss) before income taxes (13.7) 1.4

Provision for income taxes

Operating loss (12.5) (10.3)

Interest and other loss, net (3.0) (3.4)

Loss before income taxes (15.5) (13.7)

Provision (benefit) for income taxes (0.2) 3.2

Net loss (15.3) % (16.9) %

2024 January 28,

2025 February 3,

2024 % Change

in fiscal 2025

(in millions, except percentage)

Net revenue $ 5,767.3 $ 5,507.7 4.7 %

Our net revenue for fiscal 2024 decreased by $411.9 million compared to net revenue for fiscal 2023.

This was due to a decrease in sales from a majority of our end markets.

Sales decreased from the data center end market by 8%, from the enterprise networking end market by 10%, from the consumer end market by 11%, and from the carrier infrastructure end market by 3%.

The decreases were partially offset by an increase in sales from the automotive/industrial end market by 9% compared to fiscal 2023.

The overall decrease in net revenue of 7% for fiscal 2024 was primarily driven by lower unit shipments related to storage products, partially offset by higher average selling prices for certain products as well as an increase in demand for our optical products, driven by AI applications.

Our net revenue for fiscal 2025 increased by $259.6 million compared to net revenue for fiscal 2024.

This was primarily due to an 88% increase in sales from the data center end market which benefited from strong AI demand.

The increase was partially offset by a decrease in sales from the carrier infrastructure end market by 68%, from the enterprise networking end market by 49%, from the consumer end market by 49%, and from the automotive/industrial end market by 17%, which have been navigating inventory corrections and soft industry demand.

Cost of Goods Sold and Gross Profit

2024 January 28,

2025 February 3,

2024 % Change

in fiscal 2025

(in millions, except percentages)

3 unchanged sentences

% of net revenue 41.3 % 41.6 %

Cost of goods sold as a percentage of net revenue increased for fiscal 2024 compared to fiscal 2023, which includes charges of $251.0 million for product related claim matters that were fully resolved in the fourth quarter of fiscal 2024, as well as a shift in product mix.

Refer to “Note 6 - Commitments and Contingencies” in the Notes to Consolidated Financial Statements for further information on the product related claim matters.

Cost of goods sold as a percentage of net revenue was relatively flat for fiscal 2025 compared to fiscal 2024.

Cost of goods sold in fiscal 2025 was impacted by impairment charges of $357.9 million for acquired intangible assets, inventories, property and equipment, and other non-current assets associated with restructuring actions during fiscal 2025.

See “Note 4 – Restructuring” in the Notes to Consolidated Financial Statements for further information.

Cost of goods sold in fiscal 2024 was impacted by charges for product related claim matters, that were fully resolved in the fourth quarter of fiscal 2024.

As a result, gross margin for fiscal 2025 decreased 0.3 percentage points compared to fiscal 2024.

Research and Development

2024 January 28,

2025 February 3,

2024 % Change

in fiscal 2025

(in millions, except percentages)

2 unchanged sentences

Research and development expense increased by $54.2 million in fiscal 2025 compared to fiscal 2024.

The increase was primarily due to $57.4 million of higher engineering design costs and $45.6 million of higher employee compensation related costs.

The increase was primarily due to $34.0 million of higher employee compensation and related costs and $33.1 million of higher engineering design related costs.

The increases were partially offset by a decrease in stock-based compensation of $15.5 million.

Selling, General and Administrative

2024 January 28,

2025 February 3,

2024 % Change

in fiscal 2025

(in millions, except percentages)

1 unchanged sentence

% of net revenue 13.8 % 15.1 %

Selling, general and administrative expense was relatively flat in fiscal 2024 compared to fiscal 2023.

Selling, general and administrative expense decreased by $35.8 million in fiscal 2025 compared to fiscal 2024.

The decrease was primarily due to charges for an intellectual property matter during fiscal 2024, as well as $22.7 million of lower depreciation and amortization expense.

The decreases were partially offset by higher employee compensation and related costs of $9.8 million.

Stock-Based Compensation Expense

2024 January 28,

2025 February 3,

(in millions)

3 unchanged sentences

Total stock-based compensation $ 597.4 $ 609.8

Stock-based compensation expense increased by $57.4 million in fiscal 2024 compared to fiscal 2023.

Stock-based compensation under research and development, selling, general and administrative, and cost of goods sold increased by $38.7 million, $12.9 million, and $5.8 million, respectively.

The increase was primarily due to an increase in equity awards granted in fiscal 2024 as compared to prior years, as well as an increase in expense associated with our employee stock purchase plan.

Legal Settlement

2024 January 28,

2023 % Change

(in millions, except percentages)

Legal settlement $ — $ 100.0 *

% of net revenue — % 1.7 %

*Not meaningful

We recorded a charge of $100.0 million in fiscal 2023 related to the settlement of a contractual dispute.

Refer to “Note 6 – Commitments and Contingencies” in the Notes to Consolidated Financial Statements for further information.

Stock-based compensation expense decreased by $12.4 million in fiscal 2025 compared to fiscal 2024.

Stock-based compensation under research and development and cost of goods sold decreased by $15.5 million and $1.8 million, respectively, and stock-based compensation under selling, general and administrative increased by $4.9 million.

The overall decrease was primarily due to a decrease in expense associated with our employee stock purchase plan.

Restructuring Related Charges

2024 January 28,

2025 February 3,

(in millions)

Restructuring related charges $ 353.9 $ 131.1

We recorded total restructuring related charges of $131.1 million in fiscal 2024 as a result of our restructuring plan to streamline our organization and optimize resources.

Refer to “Note 10 – Restructuring” in the Notes to Consolidated Financial Statements for further information.

Interest Income

2024 January 28,

2023 % Change

(in millions, except percentages)

Interest income $ 8.8 $ 5.3 66.0 %

% of net revenue 6.1 % 2.4 %

Interest income increased by $3.5 million in fiscal 2024 compared to fiscal 2023 due to higher interest rates on our invested cash.

Interest Expense

2024 January 28,

We recognized $353.9 million of restructuring related charges in fiscal 2025 as we continued to evaluate our existing operations to increase operational efficiency, decrease costs and increase profitability.

Restructuring charges for fiscal 2025 were mainly comprised of impairment and write-off of purchased technology licenses and property and equipment, as well as recognition of future contractual obligations, severance, other one-time termination benefits, and other costs.

See “Note 4 – Restructuring” in the Notes to Consolidated Financial Statements for further information.

Interest and Other Loss, Net

2025 February 3,

2024 % Change

in fiscal 2025

(in millions, except percentages)

Interest expense $ (189.4) $ (211.7) (10.5) %

% of net revenue (3.8) % (2.9) %

Interest expense increased by $41.1 million in fiscal 2024 compared to fiscal 2023.

The increase was primarily due to higher interest expense associated with the 2024 and 2026 Term Loans, as well as interest expense associated with the 2029 and 2033 Senior Notes issued during the third quarter of fiscal 2024.

Refer to “Note 4 – Debt” in the Notes to Consolidated Financial Statements for further information.

Other Income, net

2024 January 28,

2023 % Change

(in millions, except percentages)

Other income, net $ 11.9 $ 12.4 (4.0)%

Interest income and other, net 15.0 20.7 (27.5) %

Interest and other loss, net $ (174.4) $ (191.0) (8.7) %

% of net revenue (3.0) % (3.4) %

Other income, net was relatively flat in fiscal 2024 compared to fiscal 2023.

Provision for Income Taxes

2024 January 28,

Interest and other loss, net decreased by $16.6 million in fiscal 2025 compared to fiscal 2024.

The net decrease was primarily due to a decrease in interest expense and an increase in interest income.

The decrease was partially offset by higher factoring fees for the sales of receivables in fiscal 2025 as compared to fiscal 2024, as well as lower net gains recognized from equity investments.

Provision (Benefit) for Income Taxes

2025 February 3,

2024 % Change

in fiscal 2025

(in millions, except percentage)

Provision for income taxes

Provision (benefit) for income taxes

$ (9.7) $ 174.7 (105.6) %

The income tax benefit for fiscal 2025 differs from the U.S.

federal statutory tax rate of 21% as a result of foreign income inclusions in the U.S., a portion of our earnings or losses being taxed or benefited at rates lower than the U.S.

statutory rate, research and development credit generation, and deductions related to stock compensation.

The income tax expense for fiscal 2024 differs from the U.S.

federal statutory rate of 21% as a result of foreign income inclusions in the U.S., a portion of our earnings or losses being taxed or benefited at rates lower than the U.S.

federal statutory tax rate of 21% as a result of foreign income inclusions in the U.S., a portion of our earnings or losses being taxed or benefited at rates lower than the U.S.

statutory rate, research and development credit generation, and disallowed deductions related to non-deductible compensation.

2 unchanged sentences

As a result of this guidance, certain costs are currently deductible rather than capitalizable, which resulted in a reduction to our income tax payable and an increase in our deferred tax assets for which we maintain a full valuation allowance.

The income tax expense for fiscal 2023 differed from the U.S.

federal statutory rate of 21% primarily due to the remeasurement of Singapore deferred taxes upon extension of our tax incentive in Singapore, tax benefits attributable to reduction in tax reserves as a result of settled income tax audits in combination with the lapsing of statute of limitations, offset by foreign income inclusions in the U.S., and a tax expense related to the recapture of Israel corporate income taxes.

The income tax expense for fiscal 2023 is also impacted by a substantial portion of our earnings, or in some cases, losses being taxed or benefited at rates lower than the U.S.

statutory rate, stock compensation tax benefits, and disallowed deductions related to non-deductible compensation.

Our provision for incomes taxes may be affected by changes in the geographic mix of earnings with different applicable tax rates, acquisitions, changes in the realizability of deferred tax assets, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of income tax audits, the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws and regulations.

It is also possible that significant negative evidence may become available that causes us to conclude that a valuation allowance is needed on certain of our deferred tax assets, which would adversely affect our income tax provision in the period of such change in judgment.

Additionally, please see the information in “Item 1A.

Risk Factors” under the caption “ Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results .”

Our Annual Report on Form 10-K for the fiscal year ended January 28, 2023 includes a discussion and analysis of our financial condition and results of operations for the year ended January 29, 2022 and year-to-year comparisons between the fiscal years ended January 28, 2023 and January 29, 2022 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

It is also possible that significant neg ative evidence may become available that causes us to conclude that a valuation allowance is needed on certain of our deferred tax assets, which would adversely affect our income tax provision in the period of such change in judgment.

Several countries in which we operate have enacted, or have committed to enact, legislation based on the Organization for Economic Cooperation and Development’s 15% global minimum tax regime.

The enacted legislation did not have a significant effect on our provision for income taxes for fiscal 2025.

However, Singapore has enacted legislation based on the Pillar Two tax framework, including a 15% minimum top up tax, for years beginning on or after January 1, 2025.

This legislation is effective for us in fiscal 2026 and could significantly affect our provision for income taxes beginning in fiscal 2026.

Additionally, please see the information in Part I, Item 1A, “Risk Factors” under the caption “ Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results .”

Our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 includes a discussion and analysis of our financial condition and results of operations for the year ended January 28, 2023 and year-to-year comparisons between the years ended February 3, 2024 and January 28, 2023 in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Liquidity and Capital Resources

Our principal source of liquidity as of February 3, 2024 consisted of approximately $950.8 million of cash and cash equivalents, of which approximately $744.1 million was held by subsidiaries outside of the United States.

Our principal source of liquidity as of February 1, 2025 consisted of approximately $948.3 million of cash and cash equivalents, of which approximately $716.9 million was held by subsidiaries outside of the United States, a portion of which are deemed to be indefinitely reinvested.

We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States.

See “Note 12 – Income Taxes” in the Notes to Consolidated Financial Statements for further information.

In December 2020, to fund the Inphi acquisition, we executed the 2024 and 2026 Term Loan Agreement to obtain the 2024 and 2026 Term Loans.

On April 14, 2023, we entered into an amendment to the 2024 and 2026 Term Loan Agreement.

The amendment modifies the existing agreement to, among other things, adopt Secured Overnight Financing Rate (“SOFR”) interest rates and conform the maximum leverage ratio financial covenant with the amended and restated revolving credit agreement.

During the quarter ended October 28, 2023, we repaid in full the 3-Year Tranche Loan, due on April 19, 2024 (“2024 Term Loan”), which had a remaining principal of $735.0 million.

For the year ended February 3, 2024, we repaid $87.5 million of the principal outstanding of the 5-Year Tranche Loan (“2026 Term Loan”).

As of February 3, 2024, we had $700.0 million borrowings outstanding under the 2026 Term Loan.

In December 2020, we also executed a debt agreement to obtain a $750.0 million revolving credit facility.

On April 14, 2023, we entered into an agreement to amend and restate the credit facility to increase the borrowing capacity to $1.0 billion (as so amended and restated, the “2023 Revolving Credit Facility”).

The 2023 Revolving Credit Facility has a 5-year term and a stated floating interest rate which equates to an adjusted term SOFR plus an applicable margin.

During the quarter ended April 29, 2023, we drew down $200.0 million on the 2023 Revolving Credit Facility.

During the quarter ended July 29, 2023, the Company drew down $50.0 million on the 2023 Revolving Credit Facility and repaid $50.0 million in the same quarter.

During the quarter ended October 28, 2023, we repaid the outstanding 2023 Revolving Credit Facility of $200.0 million.

Further, we drew down an additional $50.0 million on the 2023 Revolving Credit Facility and repaid $50.0 million in the same quarter.

As of February 3, 2024, the 2023 Revolving Credit Facility is undrawn and will be available for draw down through April 14, 2028.

During the quarter ended July 29, 2023, the MTI 2023 Notes and MTG 2023 Notes with aggregate principal of $500.0 million matured on June 22, 2023 and was repaid.

On September 18, 2023, we completed a debt offering and issued (i) $500.0 million of Senior Notes with a 5.5-year term due in 2029 (“2029 Senior Notes”) and (ii) $500.0 million of Senior Notes with a 10-year term due in 2033 (“2033 Senior Notes”).

As of February 1, 2025, we had total borrowings outstanding of $4.1 billion, consisting of $3.5 billion of senior notes outstanding and $590.6 million outstanding under the 2026 Term Loan.

For a description of our contractual obligations including debt, leases, and purchase commitments, see “Note 4 – Debt,” “Note 5 – Leases,” and “Note 6 – Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

For the year ended February 1, 2025, we repaid $109.4 million of the principal outstanding of the 5-Year Tranche Loan (“2026 Term Loan”).

We have a revolving credit facility with a borrowing capacity of $1.0 billion and a 5-year term (“2023 Revolving Credit Facility”).

As of February 1, 2025, the 2023 Revolving Credit Facility is undrawn and is available for draw down through April 14, 2028.

For a description of our contractual obligations including debt, purchase commitments, and leases, see “Note 7 – Debt,” “Note 8 – Commitments and Contingencies” and “Note 9 – Leases” in the Notes to Consolidated Financial Statements.

In addition, see “Note 12 – Income Taxes” regarding tax related contingencies and uncertain tax positions in the Notes to Consolidated Financial Statements.

16 unchanged sentences

We had a net loss of $885.0 million adjusted for the following non-cash items:

amortization of acquired intangible assets of $1.1 billion, stock-based compensation expense of $609.8 million, depreciation and amortization of $299.8 million, deferred income tax expense of $150.8 million, restructuring related impairment charges of $32.9 million, amortization of deferred debt issuance costs and debt discounts of $10.7 million, and $44.2 million net loss from other non-cash items.

amortization of acquired intangible assets of $1.1 billion, stock-based compensation expense of $597.4 million, restructuring related impairment charges of $528.8 million, depreciation and amortization of $304.3 million, deferred income tax benefit of $111.9 million and $65.9 million net loss from other non-cash items.

Cash inflow from working capital of $129.1 million for fiscal 2025 was primarily driven by a decrease in accounts receivable, and increases in accounts payable, accrued employee compensation, and accrued liabilities and other non-current liabilities, partially offset by an increase in inventories.

The decrease in accounts receivable was primarily due to better shipment linearity and increase in distribution reserves on stronger demand.

The increase in accounts payable was primarily due to the timing of payments.

The increase in accrued employee compensation was primarily due to bonus accrual.

The increase in accrued liabilities and other non-current liabilities was primarily driven by higher restructuring accruals, partially offset by lower ship and debit claims accrual due to lower inventory balances at distributors as a result of increased sell through, and decreases in litigation and interest accrual.

The increase in inventories was primarily to support improving demand environment.

Net cash provided by operating activities was $1.4 billion for fiscal 2024 compared to net cash provided by operating activities of $1.3 billion for fiscal 2023.

We had a net loss of $933.4 million adjusted for the following non-cash items:

amortization of acquired intangible assets of $1.1 billion, stock-based compensation expense of $609.8 million, depreciation and amortization of $299.8 million, deferred income tax expense of $150.8 million, restructuring related impairment charges of $32.9 million, and $54.9 million net loss from other non-cash items.

Cash inflow from working capital of $57.8 million for fiscal 2024 was primarily driven by a decrease in accounts receivable, and a decrease in inventories, partially offset by cash outflows due to an increase in prepaid expenses and other assets, and a decrease in accounts payable.

3 unchanged sentences

The decrease in accounts payable was primarily due to the timing of payments.

Net cash provided by operating activities was $1.3 billion for fiscal 2023 compared to net cash provided by operating activities of $819.3 million for fiscal 2022.

We had a net loss of $163.5 million adjusted for the following non-cash items:

amortization of acquired intangible assets of $1.1 billion, stock-based compensation expense of $552.4 million, depreciation and amortization of $304.9 million, deferred income tax expense of $50.4 million, amortization of inventory fair value adjustment associated with Innovium acquisition of $38.7 million, amortization of deferred debt issuance costs and debt discounts of $10.3 million, restructuring related impairment charges of $5.6 million, and $52.4 million net loss from other non-cash items.

Cash outflow from working capital of $649.8 million for fiscal 2023 was primarily driven by an increase in accounts receivable, an increase in inventories, an increase in prepaid expenses and other assets, and a decrease in accounts payable partially offset by cash inflows due to an increase in accrued liabilities and other non-current liabilities, and an increase in accrued employee compensation.

The increase in accounts receivable was primarily due to increase in sales, as well as changes to the timing of shipments due to evolving supply chain dynamics.

We increased inventory in order to better support unfulfilled backlog, new product ramps and the impact from inventory correction late in the year.

The increase in prepaid expenses and other assets was primarily due to prepayments on supply capacity reservation agreements and an increase in ship and debit reserve.

The decrease in accounts payable was primarily due to the timing of payments.

The increase in accrued liabilities and other non-current liabilities was primarily due to accruals relating to settlement of contractual disputes and an increase in ship and debit claim reserve due to price increases and stock replenishment.

The increase in accrued employee compensation was due to increases in our bonus accrual and in employee contributions to the employee stock purchase plan, net of payments.

Cash Flows from Investing Activities

Net cash used in investing activities of $350.5 million in fiscal 2024 was primarily driven by the purchases of property and equipment of $336.3 million, and purchases of technology licenses of $13.9 million.

Net cash used in investing activities of $328.4 million in fiscal 2023 was primarily driven by the purchases of property and equipment of $206.2 million, net cash consideration for business acquisitions of $112.3 million , and purchases of technology licenses of $11.1 million.

Net cash used in investing activities of $300.7 million in fiscal 2025 was primarily driven by the purchases of property and equipment of $284.6 million.

Net cash used in investing activities of $350.5 million in fiscal 2024 was primarily driven by the purchases of property and equipment of $336.3 million.

Cash Flows from Financing Activities

Net cash used in financing activities of $1.4 billion in fiscal 2025 was primarily attributable to $725.0 million repurchases of common stock, $274.9 million for withholding tax paid on behalf of employees for net share settlement, $207.5 million payment for our quarterly dividends, $153.6 million payments for technology license obligations, and $109.4 million repayment of debt principal.

These outflows were partially offset by $87.6 million proceeds from the issuance of our common stock under our equity incentive plans.

Net cash used in financing activities of $980.2 million in fiscal 2024 was primarily attributable to $1.6 billion repayment of debt principal, $223.7 million for withholding tax paid on behalf of employees for net share settlement, $206.8 million payment for our quarterly dividends, $150.3 million payments for technology license obligations, and $150.0 million repurchases of common stock.

These outflows were partially offset by $1.3 billion proceeds from issuance of debt, and $99.2 million proceeds from the issuance of our common stock under our equity incentive plans.

Net cash used in financing activities of $662.9 million in fiscal 2023 was primarily attributable to $265.6 million repayment of debt principal, $227.6 million for withholding tax paid on behalf of employees for net share settlement, $204.4 million payment for our quarterly dividends, $142.5 million payments for technology license obligations, and $115.0 million repurchases of common stock.

These outflows were partially offset by proceeds from issuance of debt of $200.0 million, and $91.3 million proceeds from the issuance of our common stock under our equity incentive plans.

Recent Accounting Pronouncements

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis